Goodbye Paypal? Apple may be building a mobile payments service

apple store — Image used with permission by copyright holder

According to a report published in the Wall Street Journal today, Apple is taking opening steps towards building a mobile payments service that would potentially take on competing services like PayPal, Google Wallet and Square. Likely integrated with credit card data linked to user accounts within iTunes, the payments system would allow consumers to pay for products on retail sites that integrated the iTunes payment system into the checkout process. Presumably, Apple could take a small percentage of the transaction for using the service.

When combined with the iBeacon service within stores, retailers could hypothetically deliver information about discounts on specific products within the store and consumers could authorize payment for those products in one seamless process utilizing a personal iTunes account. At this point, the consumer could pick up the product at a specific counter in the store or simply walk out with the product assuming a receipt is displayed to store employees on the customer’s iPhone or iPad prior to leaving the store. Apple already uses a somewhat similar process when purchasing a product in an Apple Store.

Detailed within the report, the head of Apple’s iTunes and App Store, Eddy Cue, has already met with “industry executives” to discuss the feasibility of a mobile payments service for consumers and retailers. In addition, sources within Apple have indicated that Jennifer Bailey, a VP within the Online Stores division, has been shifted to a new position that will be in charge of building the mobile payments service.

Of course, the potential to take advantage of iTunes current customer base is significant. As of last year, Apple reported having over half a billion registered iTunes users, many of which own mobile devices like iPhones and iPads. Regarding security, it’s possible that owners of the iPhone 5S will be able to take advantage of the fingerprint scanner in order to authorize a purchase. For anyone that owns an older iPhone, it’s possible that users will have to confirm the purchase with the iTunes password or a security pin.

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